In this file:
· Bankrupt Dean Foods drops Dairy Farmers of America as lead bidder
· Dean Foods walks away from DFA bid
Bankrupt Dean Foods drops Dairy Farmers of America as lead bidder
Lillianna Byington, FoodDive
March 20, 2020
o Dairy Farmers of America will no longer serve as the stalking horse bidder for Dean Foods' planned bankruptcy sale, according to documents filed Wednesday with the U.S. Bankruptcy Court for the Southern District of Texas in Houston.
o Dean said it agreed to "mutually terminate" the asset purchase agreement with DFA. Bloomberg reported that Dean abandoned a deal to make DFA the lead bidder following resistance from creditors and its bankruptcy judge.
o The dairy co-op previously agreed to buy 44 of Dean’s processing facilities and other assets for $425 million after Dean filed for Chapter 11 bankruptcy in November. In the documents filed this week, Dean said it still expected DFA to bid for its assets despite losing the position of stalking horse. The deadline to submit a bid is March 30, 2020 at 12:00 p.m.
After objections from farmers and concerns about competition surrounding the deal, DFA will no longer be the stalking horse for the sale of Dean Foods. A stalking horse bidder gives a party the first bid on the assets and sets the minimum amount for which the company could sell.
Although this decision comes about a month after DFA secured the spot as lead bidder, the two organizations have been in talks about a sale for months. When Dean Foods announced it was filing for bankruptcy about four months ago, the company said it was already planning to sell itself to DFA.
Dean Foods is the largest milk processor in the U.S. with 57 manufacturing facilities and a portfolio of brands including TruMoo and DairyPure. It made sense that DFA wanted to move quickly to buy the company because it is the dairy cooperative's biggest customer.
But there were objections to DFA as the lead bidder. An amicus curiae brief filed in the Houston court March 11 on behalf of farmer advocacy organizations, dairy farmers, members of the DFA and shareholders of Dean Foods said these groups vehemently opposed the deal.
"The Court may not be aware; DFA murdered Dean. Granted Dean should not have been hanging around with mobsters," the brief said. "This is in no way hyperbolic. The danger to America’s Dairy Industry, individual dairy farmers and ultimately the consumers cannot be overstated. DFA is the Godfather of America’s National Milk Producers Federation’s milk cartel."
Federal antitrust regulators also were probing a deal between DFA and Dean Foods before it was even announced since farm groups had raised concerns about the impact it could have on prices and competition, The Wall Street Journal reported.
This isn't the first time Dean and DFA have faced antitrust concerns...
Dean Foods walks away from DFA bid
By Larry Lee, Brownfield
March 20, 2020
Dean Foods has walked away from a February deal to sell many of its assets to Dairy Farmers of America. Dean Foods, which is going through bankruptcy, had agreed to sell 44 fluid milk and frozen product facilities, equipment, inventory, real estate, and distribution systems for 425 million dollars. Court documents obtained by Bloomberg say creditors and the bankruptcy judge were not satisfied with the deal.
A spokesperson for Dairy Farmers of America told media...